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Belarus Enters TOP-10 Crypto Friendly Countries and Attracts South Korean Investors

12 September 2018 21:48, UTC
Belarus Enters TOP-10 Crypto Friendly Countries and Attracts South Korean Investors

Belarus, a former Soviet republic with a socialistic past, is a unitary of a presidential type today. Despite the independence gained in 1991, this country is currently in a difficult economic and political situation. The country is headed by Alexander Lukashenko, who has been the permanent president since 1994. The Parliamentary Assembly of the Council of Europe has repeatedly criticized the political regime in Belarus and called for the implementation of the international isolation regime. In spite of this fact, Belarus is a member of the CIS and EurAsEC, the IMF and the World Bank and also a union state with the Russian Federation.

Some details about the economic situation in Belarus:

  • The structure of the country's economy is characterized by the domination of state property in various spheres - the influence of the Soviet past. The industrial sector is predominant, its GDP share is 37%

  • At the same time, a proportion of private enterprises in GDP is no more than 30%, which is very low in comparison with 60% of European developed countries.

  • In 2010, Philippe Le Houerou, World Bank Vice-President for Europe and Central Asia, stated that the development of the Belarusian economy was successful, but since 2011, the country has experienced a financial and economic crisis, the consequences of which still exist.

  • Since 2003, the country has been increasing foreign investments. The main investors are Russia, Turkey, Cyprus, Austria and the Netherlands.

  • Since 2005, the High Technology Park (HTP), one of the leading innovative IT clusters in Central and Eastern Europe, has been functioning in Belarus. As for September 22, 2017, 187 resident companies were registered in the HTP with more than 30 thousand workers.

  • In 2016, the HTP raised about $170 million in foreign direct investments. In 2017, the Park exported services of $1 billion worth.

The milestones of crypto industry development in Belarus

December 2017. Alexander Lukashenko declared the necessity of a new push to the country's IT industry: "Our country should become more attractive for talented professionals and successful companies."

On December 21, the Decree on the “Development of the Digital Economy" was signed, which regulates blockchain-based businesses, cryptocurrencies and other digital assets.

March 2018. According to the statements and the report of the HTP representatives, the number of registered companies in 2018 increased by a quarter. The residents of the Park cooperate with 67 countries of the world. This rapid growth is attributed to the crypto-friendly regulation in the country.

March 28, 2018. The Presidential Decree No. 8 "On the Development of the Digital Economy" came into force. Moreover, some legal documents, regarding this decree, were modified.

April 2018. The media reported on the opening of a mining hotel in Lida with the area of ​​more than 2000 square meters and a capacity of 1.2 MW.

May 2018. Belarus was one of the TOP-10 countries with crypto-friendly legislation, according to the BlockShow Europe report.

September 2018. KOBEA, South Korean Blockchain Business Association, negotiated with Belarus representatives on cooperation in the field of blockchain and cryptos.

Belarus vs Eastern Europe block in 2018

Earlier made a short survey about the crypto situation in Eastern Europe. Comparing the development of the IT sector in Belarus and most other countries of the post-Soviet space, we can suggest that despite of a high proportion of state property in the structure, industrial stagnation and energy dependence, this country is currently dealing skillfully with the innovations. At the same time, they manage to maintain control over the industry without putting investors off the private businesses.

Consider the Decree, which was created quickly and timely. Despite the unity of the content, it is, in fact, just a framework. Bulgaria, Hungary, Romania, Poland and some others are still hesitating, having cautiously entered this sphere only in summer, presenting sometimes extremely ridiculous bills. Some countries can not make up their minds about rhetoric. Some contradict themselves in bills and statements, it discourages private investors who are taking finances to Malta, Switzerland and ... yes, Belarus.

Andreas VLACHOS, a coordinator of the blockchain initiatives at the University of Nicosia, has compiled a brief summary of the Crypto Regulating Decree.

Synopsis of the Official Document (Not in English)

Key areas of discussion:

  • Startup companies launching private token-sale and crowdfunding events are required to declare the cost of their tokens in advance to the national financial regulator. However, this rule is only applicable to private players and government institutions are exempt from such undertakings.

  • Tokens purchased through ICOs will be deemed as investments for tax purposes. Depending upon the duration of the sale period, the coins should be referred to as “Long-term financial investments” — if the circulation period exceeds a full year.

  • All token purchases should be explicitly mentioned in tax files under the credit categories of “Settlements with different debtors and creditors” or “Other income and expenses.”

  • For alt-currencies that are bought by traders or online exchanges for future commercial purposes, owners need to account for them as “Goods” in the credit section and “Settlements with suppliers and contractors” within the debit category.

  • Digital coins that are procured through mining activities need to be placed under the “Finished Products” debit account and the “Primary Production” credit tab.

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